I have a 3 month old daughter and would like to change/modify her middle name. We weren't 100% sure of what we wanted her middle name to be when she was born and didn't realize that you could leave the middle name field blank when filling out the form at the hospital, so we just put something down. Well, 2 months later, we now know what we want it to be. How do we go about getting her middle name changed? Is there any way to avoid a court order name change (we are willing to hyphenate her new middle name with the one originallythere)? Could that pass as a misspelled middle name?

You can change her name anyway you want.
I gave my son Lee the middle name J figuring he could add to it if he ever wanted to someday. It does cost the clerk fee or whatever. You can change it from Ann to Zoe whatever.
You can change it here and this is a reputable company
Legalzoom.com makes changing your name easy

Or you can get a form where the birth certificate is on file
Or the clerk of courts

From our local regiser office page:

"Can the names on my child’s birth certificate be changed?

You can change your child's first name(s) on the birth certificate within 12 months of the date of the original registration. You will need to complete a simple form which is available from the registrar. The new forename(s) will appear in space 17 of the Birth Certificate.

Alternatively, if the child has been baptised in the Christian faith within 12 months of the date of the original registration you can obtain a form from the Register Office to take to the Minister of the Church in which the child was baptised. Once this form has been completed the registrar will add the new name(s) to space 17. This process can be done at any time after the birth as long as the baptism took place within 12 months of the registration. You can then purchase certified copies from this amended registration."

Your first step is to check with your local registrar. They can advise what the process is.